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Scotia profit beats NCB for first time in decade

Scotia Group Jamaica (SGJ) has made $17.2 billion in annual profit, more than its larger peer, NCB Financial, which recently underwent leadership changes.

It’s the first time SGJ has beaten NCB in its profit haul since 2013.

That said, SGJ remains satisfied with its leadership cadre and isn’t looking to snap up former NCB managers. SGJ also recently concluded a round of union negotiations which put downward pressure on its fourth-quarter results.

“Right now, we have a full complement of executives, and we are very proud of the team we have. We never say no, but at this point in time, there are no obvious vacancies,” said SGJ Group President and CEO Audrey Tugwell Henry, in response to a query on whether the group planned on hiring any of the NCB former heads.

Tugwell Henry declined to give specifics on its outlook, but stated: “We expect to get greater share of the market.”

All business lines within the SGJ group made a “strong” contribution to the overall results. Overall deposits grew by 12.7 per cent to $445 billion, and total loans increased by 14.6 per cent year-over-year to $269 billion. Also, its non-performing loans were 1.6 per cent, or under the industry average of 2.5 per cent.

The last time SGJ beat NCB in its annual profit haul was a decade ago.

At the time, SGJ made $12 billion for its full year ending October 2013, compared to $8.6 billion for NCB at September 2013.

A year later, SGJ made $10.5 billion, which was insufficient to surpass the $12.3 billion made by NCB in 2014.

Since that time, NCB increased the pace of its annual profit, hitting $30 billion in the 2019 financial year. That compared to $13.2 billion made by SGJ in 2019, which was its highest profit haul prior to 2023.

The onset of the pandemic in 2020 negatively affected SGJ’s profits, as it reflected challenging economic times arising from a health crisis.

In mid-2023, NCB underwent a leadership change that resulted in eight executives at the group and subsidiary levels leaving the entity. It was part of steps by NCB Chairman and majority owner Michael Lee-Chin taking a more active role in the group to cut costs and start a new leadership chapter.

NCB Financial holds assets of $2 trillion, which makes it the largest entity in the financial sector.

Overall, SGJ made profit of 17.2 billion for its full financial year ending October 2023, or two-thirds more when compared to year-earlier levels. The group benefited from growth in its revenue which totalled $53 billion, from $40.1 billion a year earlier.

The profit conforms to the latest International Financial Reporting Standards (IFRS) under amendment 17, which treats insurance contracts in a predictable, streamlined manner across the globe. This resulted in a downward restatement of the 2022 results to $10.3 billion, from $11.7 billion as originally reported a year earlier.

During the fourth quarter alone, SGJ’s pace of profit waned slightly, amassing $4.4 billion, or 48 per cent more than the $2.97 billion a year earlier.

The profit in the fourth quarter was, however, lower than that of the third-quarter 2023 at $5.2 billion.

“Our fourth-quarter performance was a little lower than our third-quarter, as we would have settled our union agreements, our net insurance revenues — which are computed in accordance with IFRS17 — were marginally lower than in the third quarter, and our foreign exchange volumes in terms of market activity was slightly lower,” said Gabrielle O’Connor, chief financial officer at SGJ, in response to a query.

SGJ holds assets of $665 billion, of which its capital stands at $126.5 billion after removing liabilities.

Its assets stood at $594.4 billion and capital at $106.4 billion at October 2022, which contains the restated figure arising from new accounting rules related to insurance contracts.

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